A lot of people think about building a granny flat, but worry about how this will effect their retirement.
With so many rules and regulations regarding retirement and aged care pensions, its hard to know what the right decision is regarding granny flats. For example, if you give away an asset (such as cash or property) for less than its market value, Centrelink will deem this to be a gift.
Centrelink assesses the gifts you make in order to see how they directly or indirectly reduce the assets available for your personal use in retirement and subsequent impact on the need for welfare in the future.
Gifting could have an adverse impact on your pension entitlements and this information may set off alarm bells for those of you who had been thinking about transferring property or funds to your children so that they could build you a granny flat in the backyard!
But never fear, Perth’s Granny Flat Specialist are happy to share a little secret with you… It’s called a Granny Flat Interest.
A Granny Flat Interest is established when you exchange assets or money for the right to reside in someone else’s property for as long as you live. Provided you pay a reasonable amount for this right, you will be exempt from Centrelink’s usual gifting rules. This enables you to sell your home under the granny flat provisions and pay money to your children for a lifetime right or use of a granny flat without it affecting your pension.
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